Finance Minister Announces Reduction in GST on Everyday Items
In New Delhi today, Finance Minister Nirmala Sitharaman is set to reveal a reduction in GST on everyday items for the common man and middle-class from 18 percent or 12 percent to 5 percent.
The Finance Minister announced that products such as hair oil, toilet soap, soap bars, shampoos, toothbrushes, toothpaste, bicycles, tableware, kitchenware, and various household items will now incur only a five percent GST.
Additionally, Sitharaman declared that GST on food products like namkeen, bhujia, sauces, pasta, instant noodles, chocolates, coffee, preserved meat, cornflakes, butter, and ghee has been lowered from 12 percent or 18 percent to five percent.
The Minister noted that the GST rate for items such as air conditioning units, televisions larger than 32 inches, all types of TVs, dishwashing machines, small cars, and motorcycles has been decreased to 18 percent from 28 percent. She remarked that labor-intensive industries provided significant support, while farmers and the agricultural sector will also gain from the announcements made today. The Minister mentioned that GST on all agricultural equipment has been cut from 12 percent to 5 percent.
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Regarding the automotive industry, the Finance Minister announced a GST reduction from 28 percent to 18 percent on small cars and motorcycles under 350 cc. The GST on buses, trucks, and ambulances has also been lowered from 28 percent to 18 percent.
In the health sector, the FM stated that the GST on 33 life-saving medications and drugs has been reduced from 12 percent to zero percent.
The rate for three essential cancer treatment drugs and those used for rare and severe chronic diseases has been cut from five percent to zero percent.
To enhance the affordability of insurance for the general public and broaden coverage in the nation, the FM mentioned an exemption of GST on all individual life insurance policies, encompassing term life, ULIP, or endowment policies, as well as reinsurance. There will also be a GST exemption on all individual health insurance policies, which include family floater policies and those for senior citizens, along with reinsurance.
The Finance Minister further stated that Prime Minister Narendra Modi has laid the groundwork for a new era of tax reforms, ensuring that people receive benefits promptly. She indicated that the government has addressed issues pertaining to inverted duty structures, resolved classification-related concerns, and guaranteed greater stability and predictability within the GST framework.
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The 56th Meeting of the GST Council took place in New Delhi today under the leadership of the Finance Minister. The Council discussed India’s next-generation GST reforms, focusing on tax rate rationalization and compliance simplification. Present at the meeting were Union Minister of State for Finance Pankaj Chaudhary, Chief Ministers from Delhi, Goa, Haryana, Jammu and Kashmir, Meghalaya, and Odisha. Deputy Chief Ministers from Arunachal Pradesh, Bihar, Madhya Pradesh, and Telangana, the Governor of Manipur, and Finance Ministers from various States and Union Territories also participated in the meeting.